Better living through empiricism

Inequality

October 01, 2013

At long last, after years of vitriolic opposition, America is finally joining the ranks of the other developed nations and offering a rudimentary form of universal health care to her citizens. While there’s sure to be some rollout technical glitches and such, HealthCare.Gov, the site for those without employer plans to comparison shop for healthcare insurance and see what subsidies are available, is now online. [The plans, start on January 1, 2014, so most people will probably wait until December, but consumers can start checking them out now.]

So between now and the 2014 elections, the public will get a chance to try out the Affordable Care Act and see if they like it. If they do, then universality will be the foundation for our healthcare system. If they don’t, then Democrats will lose big, as we should. A minority of House Republicans, with the backing of the Speaker, are utterly desperate to prevent the public from seeing the benefits of a law that has already passed. That is what the government shutdown fight is about and what the debt ceiling fight is about.

The Republican Party is bending its entire will, staking its very soul, fighting to its last breath, in service of a crusade to....

Make sure that the working poor don't have access to affordable health care. I just thought I'd mention that in plain language, since it seems to get lost in the fog fairly often. But that's it. That's what's happening. They have been driven mad by the thought that rich people will see their taxes go up slightly in order to help non-rich people get decent access to medical care.

But they are failing. We held the line. Now we just have to minimize the damage that their sabotage will do to the nation.

As ever, speaking for myself, and not the employer. Title from a catchy Ari DeFranco song that Monica introduced me to. [It isn’t actually that appropriate to this crisis, but I like the song. I’ve also fixed a few typos(with Kate’s help) after posting.]

Agnes Under the Big Top is a series of immigrant character studies with a subway theme. It was the subway that pulled me in; I hadn’t even realized that this would be the third play I’d see this year with my high school friend Nora Achrati in a big role. Thus, I am a bit biased, but I still disagree with the Post’s second assessment.

The characters are a mix of two Bulgarians who left the circus life, the Liberian who is the title character, an Indian striver (Jason Glass) , a busker playing a variety of roles (Jon Jon Johnson), and a bedridden American (Annie Houston). Their experiences were not exactly the stuff of the American dream. Indeed, much of the play focused on the stories we tell each other and ourselves and how they help or harm us. At ninety minutes and with a pay what you want ticket price, if the elements of that setup intrigue you and you’ve got room in your plans for a Silver Spring visit this Friday or Saturday, I’d recommend checking it out.

My favorite of the characters was Ed Christian’s Shipkov, a former ringmaster-turned-subway operator. Weighed down with cynicism, he’s still the inveterate showman, prone to holding forth as he trains a new apprentice. While the tone is dark, he, along with much of the show, was quite funny and the flashbacks to his past made his present condition all the more heartbreaking. Shipkov and Rosa, Nora’s character, once had a loving relationship that fell apart for a reason I did not expect but that felt achingly real. I found this a particularly impressive feat, as Rosa was speaking Bulgarian for most of the play but her feelings shone through. My favorite of Shipkov’s monologues was his complaint about present culture where many dream of being on the stage with little appreciation of the work that goes into doing it right. I definitely revisited this sentiment last Saturday while watching a few Flugtag skits that would have greatly benefited from the assistance of someone with some actual training.

I was also quite impressed by Joy Jones as the title character, Agnes, who makes a fairly effective argument for just stretching the truth a bit.

However, the specific mechanism of her last big decision rang false to me. There is much that proper storytelling and perspective can do, particularly in the lives of the characters of this play. However, there are also very real limits to stories and I don’t think magical realism should be allowed to trump an act that does great harm to another.

Hayes pins the blame on an unlikely suspect: meritocracy. We thought we would just simply pick out the best and raise them to the top, but once they got there they inevitably used their privilege to entrench themselves and their kids (inequality is, Hayes says, “autocatalytic”). Opening up the elite to more efficient competition didn’t make things more fair, it just legitimated a more intense scramble. The result was an arms race among the elite, pushing all of them to embrace the most unscrupulous forms of cheating and fraud to secure their coveted positions. As competition takes over at the high end, personal worth resolves into exchange value, and the elite power accumulated in one sector can be traded for elite power in another: a regulator can become a bank VP, a modern TV host can use their stardom to become a bestselling author (try to imagine Edward R. Murrow using the nightly news to flog his books the way Bill O’Reilly does). This creates a unitary elite, detached from the bulk of society, yet at the same time even more insecure. You can never reach the pinnacle of the elite in this new world; even if you have the most successful TV show, are you also making blockbuster movies? bestselling books? winning Nobel Prizes? When your peers are the elite at large, you can never clearly best them.

The result is that our elites are trapped in a bubble, where the usual pointers toward accuracy (unanimity, proximity, good faith) only lead them astray. And their distance from the way the rest of the country really lives makes it impossible for them to do their jobs justly—they just don’t get the necessary feedback. The only cure is to reduce economic inequality, a view that has surprising support among the population (clear majorities want to close the deficit by raising taxes on the rich, which is more than can be said for any other plan). And while Hayes is not a fan of heightening the contradictions, it is possible that the next crisis will bring with it the opportunity to win this change.

My favorite points:

Meritocracy and Equality of Opportunity do not deserve the moral weight we give them:

Hayes draws on Robert Michel's iron law of oligarchy as an inspiration for his theory as to why meritocracy fails:

"The Iron Law of Meritocracy states that eventually the inequality produced by a meritocratic system will grow large enough to subvert the mechanisms of mobility. Unequal outcomes make equal opportunity impossible. The Principle of Difference will come to overwhelm the Principle of Mobility. Those who are able to climb up the ladder will find ways to pull it up after them, or to selectively lower it down to allow their friends, allies, and kin to scramble up. In other words: 'Whoever says meritocracy says oligarchy.'" p. 57.

In comments, people often say that the American system is not genuinely meritocratic. I put as much weight on that as those that say the Soviet Union wasn't really communist.

Because our system now depends on the idea that children are universally capable of being educated to certain necessary levels to benefit our economy. Globalization and neoliberalism — the basic economic consensus of policy elites — destroyed working-class jobs and incomes and sparked a furious attack on labor’s ability to unionize and collectively bargain for better conditions. Yet the neoliberal policy apparatus still needs a mechanism to improve wages for those at the bottom, in part to improve their living conditions and in part because the economy requires them to be consumers as well as producers. Having cut the legs out from underneath the traditional mechanisms of social mobility for uneducated Americans, the necessary step becomes plain: educate all of them. Questions about whether everyone can be educated to the necessary level cannot be countenanced, to say nothing of whether this system breeds zero-sum competition for limited “skilled” jobs.

Our vexed arguments about education reform stem from our refusal to acknowledge that we are constrained by reality, regardless of the needs of our economic system.

Matt Yglesias regularly notes the incongruity of teachers arguing that students' socioeconomic traits are the main factors determining their success. However, that is not primarily an argument that teachers don't matter; it is just an explanation as to why even good teachers cannot boost up their students sufficiently that education can get the median wage going again. Good teachers might be a jet engine lifting up students, but that doesn't mean they have the power to get them into orbit. This does not mean that money spent getting better teachers is wasted. I believe the marginal returns on education to be quite high; it just means that even valuable education reforms won't do for workers what strong unions once managed. I do think that DeBoer overstates the "zero-sum" nature of competition for skilled jobs. There are a fair number of skills still in fairly great demand that may not be able to replace the unskilled work of yesteryear, but are still at a point where adding a worker increases the demand for other workers. However, there are also fields like law, where the education system at large is rooking people into accumulating great debt for often dubious job prospects. I think that situation has persisted as long as it has because LSAT-ing your way to success is entirely in line with the myths of meritocracy.

Look for fraud, not bubbles:

Eager to avoid repeating their mistakes, many pundits constantly ponder whether this or that is the next bubble. Chris Hayes shows that why this is mistaken. The problem with the housing boom wasn't excessive enthusiasm, it was widespread fraud. The basis of the problem has been understood for centuries:

Thomas Gresham: "In this wild, unregulated monetary world, you had two different type of coins floating in circulation: "good" money, which was pure and properly weighted, and "bad" money, which was debased and did not contain the amount of it purported to contain. In such a situation people got pretty good at identifying what was good money and what was bad; what they'd do was use bad money for exchange while having the good money. Eventually bad money became the only money in circulation… fraudulent actors drive out the honest if fraudulent actors receive no sanction for their action." p. 92-93

Hayes also notes this pattern in the steroid scandal in Enron, Major League Baseball and cheating under Michelle Rhee's education reforms in Washington D.C. (He contrasts that with Chicago where Steven Levitt was hired to monitor for cheating and managed to prevent widespread scandals.) Hayes cites William Black's description of these cases as "Criminogenic environments" where corruption became endemic. To me, the connection to bubbles is obvious, as providing an easy path to success feeds on itself and in business or financial sectors may redirect resources from legitimate enterprises.

The term Fractal Inequality:

It's a lovely term that updates what Lewis Carroll called the inner ring phenomenon. Status competition is like an onion: as you manage to break into one layer there's always another inner ring. What's changed in my view is globalization: elites now compare themselves to others at events like the World Economic Forum at Davos, not just those in the same town, state, or even country.

The book left me with three questions:

How important was globalization to this phenomenon? I think there is a cosmopolitan global elite in a way there really wasn't in prior eras. But even if I'm right, how big of a driver of inequality is this phenomenon? Similarly, what's the relationship between trade and inequality, and can trade deals be fashioned such that all the gains don't accrue to the top?

Do civil service barriers help? In the think tank where I work, the difficulty of corporate-government cooperation and of hiring government workers from the outside is regularly decried. This may lead to you correctly pegging most think tank as meritocratic (note: I'm speaking for myself here as always on this blog). But this leaves me curious: to what extent do civil service rules actually manage to put a break on the emergence of a meritocratic elite? Or have they been made obsolete by a churn of employees departing for better-paying corporate work and an increased reliance on contractors?

How does our present situation compare to pre-WWII history?I'd take meritocracy, with all its faults, over aristocracy in a heartbeat, although I suppose there's something to be said for competing sets of elites. Hayes does note that the meritocracy manages greater diversity than older forms of elite governance, but I'd be interested in a bit more history which might reveal to what extent the vaunted American 1950s were a postwar aberration or a phenomenon that had been replicated in other times and places.

March 27, 2011

Bob Herbert is leaving his op-ed column at the NY Times “to write a book and expand my efforts on behalf of working people, the poor and others who are struggling in our society.” His swan song is well worth reading:

The U.S. has not just misplaced its priorities. When the most powerful country ever to inhabit the earth finds it so easy to plunge into the horror of warfare but almost impossible to find adequate work for its people or to properly educate its young, it has lost its way entirely…

Overwhelming imbalances in wealth and income inevitably result in enormous imbalances of political power. So the corporations and the very wealthy continue to do well. The employment crisis never gets addressed. The wars never end. And nation-building never gets a foothold here at home.

December 02, 2009

While the news out of New York state is bad, the 11-2 vote for same-sex is quite gratifying. I rather liked Ta-Nehisi Coates coverage on why the political leadership is more liberal than the population:

Part of this, I'd argue, comes from working, in close proximity, with people, of all stripes, who are concerned with equality. You start out thinking only about yourself--but you end up having to think about women of all colors, gays of all colors, poor and working people of all colors. Maybe I'm just projecting here, I don't know. Modern liberalism has taken its share of hits (many of them deserved) for trafficking in identity politics. But the flip-side is that you become better informed about the politics of other identities. Again this is true of people in "leadership" positions, not of the "rank and file."

That makes sense to me. Now I’m hoping that some of that will carry over to Maryland’s Democratic leadership. Montgomery County would totally pass such a law, but the entire state is a tougher question. I just hope we’re closer now.

November 27, 2007

This discussion covered some differences between American and Europe. It
basically went along the lines I thought: American Muslims tend to be better
integrated and more prosperous than European Muslims. This can drive
radicalism. One difference a questioner pointed out is that Americans might
think more of integration in a more pluralistic sense while Europeans may think
of it more in a complete assimilation sense.

That said, this can't entirely be credited to the American model, as Matt
Yglesias (not finding the post) has noted the Mexican-American population is more comparable to the
Muslim European population in terms of often being brought in on menial labor.
For perhaps a better analogy, one questioner, Michael Werz from Georgetown, made an between second generation
radicalization in Europe to African Americans and Islam in 1968 with the Nation
of Islam and such. Where the issue was really one of civil rights and
affirmative action and not interfaith dialog. Similarly, the bombers in the
UK were from secular families and while radicalized in Europe had little
association with local mosques.

Enough context. Here's some interesting raw data from Ceri Peach, the
specifics are often hard to get as governments often don't track religion or
even ethnicity. The Muslim population is about 21 million with a third being
'old Muslim' groups that date back to the Ottoman Empire. The other 14 million
are more tied in to the guest worker phenomenon. The Muslim population is also
younger than Europeans in general. Not surprisingly, the population is also heterogeneous: by size there's the most Turks (mostly in Germany), secondly North
Africans (mostly into France), finally South Asians into the U.K.

After the break, more from Ceri Peach and some highlights from the other speakers:

September 03, 2007

The President visited the city again a few days ago, "Even in the handpicked audience for the president's Wednesday morning
school appearance, some voiced skepticism mixed in with gratitude for
Bush's show of support." He can't even get a crowd of loyalists together, that pretty much says it all.

So what's the large[r] situation:

Still, only two-thirds of the pre-Katrina population of New Orleans
has returned to the city, and storm damage remains visible. Only 40
percent of the city's public school students have returned, although
sales tax receipts have climbed to 84 percent of pre-storm levels,
according to a new Brookings Institution report.

[The author] reverses gears and
writes a sensible, unemotional chapter about the debate over whether
New Orleans must remain a smaller city -- having a "smaller footprint,"
to use the vogue phrase -- in order to avoid having many of its
citizens return to areas that cannot be fully protected against
flooding and its consequences. One would expect Sothern to parrot the
line that "a smaller footprint would prevent poor people and minorities
from returning to their homes," but he comes out in agreement with
Pierce Lewis, the author of New Orleans: The Making of an Urban Landscape
(published originally in 1976), that "allowing people to return to
homes in flood-prone areas [is] neither 'particularly humane' nor in
accord with civil rights, when 'you know that they could drown there.'
" Sothern says the real question is "whether it is possible to shrink
the city . . . in a manner that achieves justice for the people
displaced and a better, safer, more functional city for everyone," and
he's right.

In essence, what's happening now is a de facto shrinking of New Orleans footprint without any sort of social justice for those displaced. I tend to buy the argument that purchase of flood insurance should be mandatory (with a seller of last resort available from the Feds). The alternative is temporarily ameliorating the housing of the poor by giving them an economic incentive to put their lives at risk from disasters. The administration is using neglect, its favorite domestic policy tool, to force a smaller footprint without ever having to make the argument for what they feel should be done. Thus it falls to the Dems to speak for the dispossessed, the articles shows they're trying, but time will tell whether they make a difference.

August 30, 2007

The government released its household income numbers a few days ago. There was some wage growth due to increased hours employment, but there was also a rise in the uninsured.

Steven Pearlstein had some interesting analysis in the Post. First he argued that really liberals should use the household income numbers after adjustment for taxation, food stamps, and the like. I think there's some merit to that argument. Trouble is, as Perlstein notes, those numbers don't get put out until March, so the latest numbers we have are for 2005 which is kinda stale.

If your curious how much of a difference this makes, here's the differences in household income based on method of calculation:

Anyhow, I'll try to work these numbers in the next time I do some primary source research on poverty. For the moment though I'm going to focus on the rest of Pearlstein's argument. He cites "The Persistence of Poverty," a book by his friend Charles "Buddy" Karelis, a professor at George Washington University.

The book argues against the idea that the marginal benefit of a $1 is highest for the poorest American households and steadily decreases as you rise in income. This is a fairly unorthodox view, since that particularly economic rule makes a fair amount of sense. After all, the more money you have, the smaller percentage a dollar is of your income.

But what if this iron law of economics is wrong? What if it doesn't
apply at every point along the income scale? If you and everyone around
you are desperately poor, maybe it's perfectly rational to think that
an extra dollar or two won't make much of a difference in reducing your
misery. Or that you won't be able to "study" your way out of the
ghetto. Or that if you find a $100 bill on the street, maybe it's
logical to blow it on one great night on the town rather than portion
it out a dollar a day for 100 days.

On the other hand, maybe the
point at which people are most willing to work hard, save and play by
the rules isn't when they are very poor, or very rich, but in the
neighborhoods on either side of the point you might call economic
sufficiency -- a motivational sweet spot that, in statistical terms,
might be defined as between 50 percent ($24,000) and 200 percent
($96,000) of median household income. And if that is so, then maybe the
best way to break the cycle of poverty is to raise the hopes and
expectations of the poor by putting them closer to the goal line.

Apparently Karelis just backs it up with anecdote and logic. That's not necessarily a problem, this is a falsifiable theory. One possible experiment would be to give an equivalent amount of money to people with varying incomes and then track how they spend it. If the theory is right, then the money should be best used for long term ends by those in the lower-middle of the income spectrum.

I'm going to have to think if there's any ways to check if there's at least some correlation level support for this idea using existing statistics. What I'd really need are some numbers that track income mobility over time. That said, by the description by Tyler Cowen it sounds like the book gets a little deep into psychoanalyzing the poor without a lot of evidence to back it up. There are a lot more differences than just attitude between lower income immigrants and equivalent income native born Americans.